BusinessWeek - 01.20.2006

Russian foreign minister criticizes curbs

By Alex Nicholson, AP Business Writer

Russia's foreign minister on Friday criticized U.S. trade curbs dating back to the Soviet era, suggesting that the long-standing Jackson-Vanik amendments were an example of the unfair use of economic levers to political ends.

The amendments to the 1974 Trade Act established sanctions to force communist-led countries, particularly the Soviet Union, to allow Jewish emigration.

"To give an example of the use of economic questions for achieving unrelated political goals ... I will say just two words: Jackson-Vanik," Foreign Minister Sergey Lavrov said after the signing of an agreement pledging greater diplomatic support for Russia's railroad monopoly.

Lavrov mentioned the U.S. sanctions after denying that Russia was wielding its energy-driven economic might unfairly. Observers have suggested that Russia used a bitter gas price dispute with Ukraine to punish the former Soviet republic's new Western-leaning government.

"The use of economic levers to achieve foreign political goals is nothing extraordinary," Lavrov said. "All this must be done according to international law. This is exactly how Russia is using its economic, transport, transit and other geopolitical advantages."

He said Jackson-Vanik "doesn't correspond to the international legal framework."

Lavrov called the agreement he signed with the head of OAO Russian Railways, Vladimir Yakunin, a part of the "process for deepening the cooperation of the Foreign Ministry with leading Russian companies."

"Policy must be grounded in the possibilities of the Russian economy as well as on the competitive advantages that favor of the Russian Federation," Lavrov said.

The Jackson-Vanik legislation so angered the Soviets that they allowed even fewer Jews to leave for a few years, but eventually Jackson-Vanik was credited with forcing the Soviets to give exit visas to more than 1 million Jews.

The restrictions became a lever to improve general human rights and now cover Russia as successor to the Soviet Union.

President Vladimir Putin has campaigned for years to have them lifted, and U.S. President George W. Bush has asked Congress in every year since 2001 to "graduate" Russia from the restrictions, but lawmakers have not voted to remove them.